1. Financial Planning and Managing Money
UNIT VII – Personal Financial Literacy

2. Economic Way of Thinking
Statistics prove that most teenagers are not properly prepared to make financial decisions.
Many adults also struggle with this.
The average score earned on a national financial literacy test among young people was 48.3% - a failing grade.
This number is down from 10 years ago.
The goal of this unit is to improve your basic understanding of financial management for your future.

3. Basic Rules for Improving Your Financial Life
Get a good education
Work long, hard, and smart
Learn money-management skills
Spend less than you could spend
Save early and often
Invest in common stocks for the long term
Gather information before making decisions

4. Step 1: Set Goals What do you want in the future?
House, children, car, etc.
Must set short-term and long term goals.
Short-term examples:
Long-term examples:

5. Step 2: Plan for Your Future
Education is key
“The more you learn, the more you earn.”
Varying levels of education
Dropout
High School Diploma
Associate’s (2 – year) degree
Bachelor’s (4-year) degree
Graduate degree (avg. 3 years)
Doctorate (PhD) (avg. 2 years)
Both of These are on top of a 4 year Bachelor’s degree.

6. Education and Earning Power
Level of Education
Median Weekly Income
Median Yearly Income
Not a high school graduate
$451
$23,452
High school graduate
$638
$33,176
Some college
$719
$37,388
Associate’s degree
$768
$39,936
Bachelor’s degree
$1,053
$54,756
Master’s degree
$1,263
$65,676
Doctoral degree (PhD)
$1,551
$80,652
*Statistics from 2011 Bureau of Labor Statistics

7. Education and Employment
Level of Education
Unemployment Rate
Not a high school graduate
14.1% (1 in 7)
High school graduate
9.4% (1 in 11)
Some college
8.7% (1 in 12)
Associate’s degree
6.8% (1 in 15)
Bachelor’s degree
4.9% (1 in 20)
Master’s degree
2.4% (1 in 42)
Doctoral degree (PhD)
2.5% (1 in 40)
*Statistics from 2011Bureau of Labor Statistics
“More than 2/3 of the new jobs being created in our economy are in occupations that require some kind of post-secondary education.”
~Sec. of Labor Elaine Chao, May 31, 2006

8. Step 3: Budget Your Money
Budgeting is essential to staying ahead
Step 1 : List expenses
Step 2 : Record earnings
Step 3: Analyze – where can increases/decreases be made
Step 4 : Be sure to leave extra
Step 5 : Continue monitoring spending and make adjustments as needed